The Critical Convergence Between IT, Cybersecurity and Insurance

The Critical Convergence Between IT, Cybersecurity and Insurance

The complexities of technologies in the early days of computing are nothing compared with what MSPs contend with today. The speeds and feeds of yesteryear have evolved into conversations about processes and regulations and addressing challenges and opportunities with real business solutions. While running cable and repairing PCs are still vital functions, clients expect much more from their IT services partners today. That increasing reliance creates several key advantages for MSPs – from added revenue opportunities to greater customer satisfaction – as well as a few big drawbacks.   

Most IT service providers’ greatest challenge is managing all their responsibilities without fail. While core technologies may be a strength, keeping track of and juggling all the different business and regulatory concerns can be a nightmare without the right people and systems in place. The reality of running an MSP today is that IT is no longer the

sole priority. Providing multi-layered cybersecurity protections and advising clients on business continuity planning and awareness training are just as important as compliance with regulatory and industry requirements and obtaining the appropriate cyber insurance policy. Measuring and monitoring cyber risk in all environments the IT services provider manages is part of those responsibilities.

The convergence of multiple factors that influence and help protect these robust yet entirely vulnerable IT ecosystems is critical to MSP success today. Providers can no longer pick and choose which pieces of their clients’ businesses they wish to support without ensuring another capable entity has those obligations covered. Whether the company employs its own internal tech team or MSPs collaborate with peers, vendors and other suppliers to deliver various services, the responsibility increasingly falls on IT services companies to manage it all.

The Cybersecurity Equation

Some industry experts have suggested that every MSP should consider becoming a full-fledged MSSP, focusing most, if not all, of its resources on building and managing formidable defenses for business clients. The reality of the situation is that many organizations rely on providers with a mix of IT and cybersecurity skills to keep their operations running effectively. However, virtually every MSP dedicates more time and resources to data and network protection today to stave off potential malware attacks and other cybercrime.

While many industry experts predicted future shifts in the IT services provider business model, the pandemic and ensuing push to WFH shortened that timeline considerably. The subsequent rise in nation-state-supported ransomware attacks was a driving force behind many         

of those transitions, requiring most MSPs to commit more resources to strengthen their clients’ defenses.

Implementing proactive cybersecurity services like awareness training and multi-factor authentication is now the norm. While MSPs continue to support the entire IT ecosystem − including devices, networks, software and cloud-based applications – consultation on data protection and disaster recovery practices and policies is gaining importance and creating new revenue opportunities.

Cybersecurity has become a major differentiator for providers that understand how to identify, measure and monitor those risks and tackle all the current and potential vulnerabilities. Small businesses (and many larger organizations) rely more on third parties like MSPs and MSSPs to provide those services today.         

The Symbiotic Relationship Between MSPs and Cyber Insurance Firms

Businesses are increasingly looking to the IT services community for insight on a variety of new issues in addition to the traditional services they’ve come to depend on to keep their operations in order. As in the case of cybersecurity, organizations want and need complementary types of support, including consultation on regulatory compliance, disaster recovery (technical and procedural) and risk assessment.

Decision-makers often look to MSPs for insight on issues on the fringe of their areas of expertise. Some of those questions or requests may fall outside of a provider’s legal comfort zone. Cyber insurance is a good example, as company executives look to MSPs for advice on finding the right companies and policies to cover potential liabilities.

Those requests should be seen as opportunities for IT professionals. When clients seek insight across multiple disciplines, especially those not entirely in the traditional IT realm, it’s a sign of a strong business relationship. The more support MSPs can provide, the greater those bonds. Whether providing that assistance solo or with specialists in              

those fields, those actions increase the value-add and trust between customers and providers.    

Cyber insurance is one of those key areas of opportunity. By aligning with a reputable firm with specific expertise in IT-related liabilities, MSPs can ensure customers are investing in more effective defenses while potentially increasing the providers’ recurring revenue. For example, DataStream Cyber Insurance can assess the security posture of each client, identify vulnerabilities, and make recommendations to ensure those companies are “insurable.” This process gives MSPs an opening to discuss specific improvements to minimize liabilities for providers and their clients.

DataStream brings an in-depth understanding of insurance and cybersecurity standards and expectations to these partnerships, as well as unique AI technologies that identify areas of concern. The ability to leverage real customer data and proprietary models that measure real cyber risk is a key differentiator. MSP partners play a critical role in this assessment process and can leverage the results to strengthen their clients’ cybersecurity posture and potentially boost sales and profitability.

A Value-Added Relationship

While it’s true that only certified insurance agents can sell policies, IT services providers can grow MRR and project income through a DataStream alliance. MSPs register their clients for an assessment that will identify vulnerabilities and behaviors that put them at risk and emphasizes solutions their provider can implement to address those problem areas. DataStream provides partners with details of the factors preventing each assessed business from obtaining cyber insurance coverage.

This is when the MSP comes to their rescue. With implicit knowledge of that client’s security posture, providers can pitch the proper solutions to bring their defenses up to par. The end game is to make companies aware of their risks and increase cybersecurity investments − which benefits MSPs and their clients.

With the COVID-19 lockdowns and corresponding increase in work from home and hybrid environments, those opportunities are plentiful. Along with the ensuing rise in ransomware attacks, the conversations around cybersecurity are growing in frequency and complexity – a perfect opening for MSPs that can pitch solutions, not the “speeds and feeds” of technology. Why not make cyber insurance part of that conversation?

Resources like the Cyber Insurance Assessment help businesses determine their readiness for cyber insurance. And our Partner Cyber Risk Report shows partners numerically how much impact they have on reducing cyber risk among their business clients. Would a sales prospect pay more attention if they could visualize the effect your firm could have on their data defenses? DataStream provides MSPs with that power.